During the harsh times of Covid-19 when the world was at halt and the cases were rising at an all-time high around 3 to 4 lakh per day many reputed journals had published that in upcoming time India will face a spike of 15 lakhs cases daily. In such a time where Govt. has limited budget for the country of population around of 1.3 Billion, it is really impossible for Govt. to reach out to each and every citizen of the country with hand of only 30 lakh crores budget.
In such times corporate houses have stood up together with the govt, to strengthen the healthcare system, infrastructure, have provided free food, oxygen supply, oxygen cylinders, medicine, have set up Covid-hospital, given free medicines and ventilator and many other important things that helping the country’s fight against the pandemic. The corporate has not only donated huge funds for the relief efforts, they are also tracking the use of donated funds and assuring their impact.
India is one of the first countries in the world which had made corporate social responsibility (CSR) mandatory, following an amendment made on 14th April to the Company Act, 2013.
Corporate social responsibility (CSR) is a self-regulating business model which helps the company to be socially accountable – to its stakeholder, society, and public.[1]
Corporate can after this amendment, invest their profits in areas such as education, poverty, gender equality, and hunger as part of any CSR compliance. The new rules in section 135 of Company Act have made it compulsory for corporate of a certain turnover and profitability to spend at least 2% of their avg net profit for last 3 years. As per the government, this will lead to $3.3 billion in funding for the development projects[2].
Theirs is no doubt that India is facing enormous development issues and that can only be tackle when gov’t , civil society and corporates come together to address them.
Many large companies are handling CSR through their foundations, while small & midsize companies are setting up internal teams to monitor projects carried out by them. Many companies have also grabbed the easiest way for their required spending by investing in ‘Gov’t’s priorities project such as building toilets, adopting local villages or funding “Prime Minister’s National Relief Fund”.
According to an Article on Devex, Venkatesh Kumar, director of the Tata Institute of Social Sciences is quoted as saying, “There are some [companies] who are doing exceptionally good work, there are some who are catching up, there are some who have also not understood the concept of CSR and probably are not doing it the way it should be done.”[3]
The Indian corporate sector welcomed this notification with an open mind. It has created a win-win situation for big giants with existing corporate social responsibility (CSR) obligations and funds at disposal who want to contribute to relief work and meet the minimum requirement of The Company Act.
All expenditures incurred on activities related to COVID-19 would be added as permissible avenues for CSR expenditure. The corporate social responsibility (amendments) Act,2019 introduced under the company act now requires companies to deposit the unspent CSR funds into Schedule VII of the Act within the end of the fiscal year. This Fund must be utilized within 3 years from the date of transfer.
Funds can be spent for various activities related to COVID-19, under the following items related to Schedule VII:
- Eradicating hunger
- Poverty
- Malnutrition
- promoting healthcare, including preventive healthcare
- Sanitation, including contribution to the Swachh Bharat Kosh for promoting sanitation and making available safe drinking water
- Disaster management which includes relief, rehabilitation and reconstruction activities
The new added law has provisions for penal as well as monetary penalties. The penalty ranges from Rs 50,000 (US$700) to Rs 2.5 million (US$35,000), whereas the defaulting officers of the company may be liable for imprisonment for up to 3 years, or a fine of INR 500,000, or both.
As per the survey in 2018 companies had spent 47% higher as compared to the amount spent in 2014-2915, contributing US$1 billion to CSR initiatives.[4]
Listed companies in India had spent INR 100 Billion in various development programs from educational, skill development, social welfare, healthcare, and environment conversation, meanwhile, Prime Minister Relief Fund (PMRF) has also seen an increase of 139% in CSR.
DURING COVID-19
In India, many corporate houses like Tata Group, ultra tech cement, Mahindra & Mahindra, ITC Group has contributed hugely in CSR initiatives. Struggling companies has also have donated to Pm cares Fund, Larsen, and Toubro (L&T) construction company contributed around 150 crores to Prime Minister Cares, while hundreds of their workers were protesting over non-payment of their wages. Reliance Industries donated Rs 500 crores. Cure. Fit, a fitness started donated Rs 5 crores in May 2020 to PM Cares.
When the Second wake took over the breath of the covid patient, Reliance industries rally all its resources on war footing to come ahead as India’s largest producer of medical-grade Liquid oxygen, it now produces 11% of total India’s production, meeting the need of 1 out of 10 patients.
Reliance Foundation had also made the largest contribution to Covid care in Mumbai, In Sir HN Reliance Foundation Hospital will be managing 650 dedicated bed Covid, 100 new ICU beds being created, 100 beds set up at Trident Hotel (BKC), 125 beds including 45 ICU beds at Seven Hills Hospital, best part All covid patients at NSCI and seven hills Hospital being treated free of cost. They have also provided free fuel for all emergency service vehicles[5]
Commenting on these initiatives, Shri. Mukesh Ambani, Chairman and Managing Director, Reliance Industries Limited, said that all of us at Reliance there is nothing more important than saving every life as India battles against a new wave of the COVID-19 pandemic. He further added that there is a need to maximize India’s production and transportation capacity for medical-grade oxygen. Appreciating his engineers, he stated that he is proud of how well they’ve worked day and night with a sense of patriotic urgency to meet up with this challenge. Reliance has delivered its services to India at the time it needed it the most.
HOW HAVE OTHER COMPANIES CONTRIBUTED?
- The Aadhar Housing Finance Ltd have gone ahead and donated 28810 three-ply masks, 10239 hand sanitizes , 112 hand gloves. The company has also contributed Rs. 50 lakh to the PM Cares fund and donated Rs.35000 to the Bandra Holy Family Hospital.
- JM Financial Home Loans Ltd has contributed over Rs. 15 crore to the PM CARES fund and another Rs. 15 Crore for supporting the medical infrastructure of the country
- The IILF Securities Ltd have contributed Rs. 5 crore to the PM Cares fund and has donated Rs. 20 Lakh to hospital and NGOs to provide protective gears to the frontline workers
- DBC Bank has setup Rs. 1 Crore fund for Covid – 19
- Hero Fincorp Ltd and Magma Fincorp Ltd have pledged Rs. 100 Crores and Rs. 5 Crores to PM Cares Fund respectively and have provided ration to over 5600 families.
- Max Life India has launched an initiative to gather one lakh social – isolation pledges and has also donated sanitizers, masks, and food to the needy. They’ve also donated Rs. 5 Crore for the COVID-19 testing kit etc.
CONCLUSION
It has rightly been said that tough times bring out the best in some and the worst of some, and this global pandemic has only shown us how much consolidated the corporate people are towards society. It wouldn’t be wrong to say that the corporate sector has come out as a savior for the common during the pandemic. There isn’t one stone that has been left untouched by these businesses, and many of them have even gone overboard in helping the nation during these tough times. The companies have not only helped the nation by providing the basic amenities but have also helped strengthen the nations’ medical infrastructure, which otherwise would have been very hard for the government to manage, all on their own. times. The companies have not only helped the nation by providing the basic amenities but have also helped
[1] https://www.investopedia.com/terms/c/corp-social-responsibility.asp
[2] https://www.devex.com/news/india-s-pioneering-csr-law-could-have-promise-but-progress-is-slow-84220
[3] https://bthechange.com/csr-in-india-is-now-a-law-2502aa6d0daa
[4] india-briefing.com/news/corporate-social-responsibility-india-5511.html/
[5] https://economictimes.indiatimes.com/industry/healthcare/biotech/healthcare/reliance-to-raise-face-mask-production-capacity-pay-contract-employees-wages-even-if-no-work/articleshow/74775134.cms?from=mdr
